Head of MAS Talks about Cryptocurrency, Central Bank Digital Currencies, and the Future of Singapore’s Fintech Sector
The Monetary Authority of Singapore (MAS) is taking a nuanced approach to regulating the cryptocurrency ecosystem, with a particular focus on stablecoins and their potential as widely-used payment instruments, said MAS managing director Chia Der Jiun
In a recent interview with Caixin Global, Chia, who was appointed to lead the country’s central bank and regulator at the start of 2024, emphasized the importance of a robust regulatory framework to ensure the stability and trustworthiness of digital assets like stablecoins while fostering innovation in the financial sector.
Stablecoins in Focus
Chia stated, “Stablecoins have features that provide more value stability, with the potential to become a widely used payment instrument. MAS sees good potential in stablecoins provided they are well-regulated to have a high degree of value stability.”
MAS has already finalized a regulatory framework targeting single-currency stablecoins, addressing value stability risks and establishing consumer protections. Under the framework, only stablecoins meeting all requirements can be recognized as “MAS-regulated stablecoins.”
This aligns with the regulator’s broader commitment to balance risk management with growth, particularly in areas like fintech and digital payments. According to Chia, tokenization – the process of representing financial assets as digital tokens – further complements the potential of stablecoins by enabling efficient, real-time settlements without intermediaries.
Regulating the Cryptocurrency Sector
Singapore’s progressive regulatory approach is evident in the expansion of its Payment Services Act (PS Act), which governs digital payment token (DPT) services, including cryptocurrencies. Since the commencement of the PS Act in January 2020, the number of licensed Major Payment Institutions (MPIs) in Singapore has grown to over 200, Chia noted.
This year alone, Singapore approved 14 crypto licenses for exchanges including OKX, Upbit, Anchorage, Bitgo, and GSR -more than doubling the licenses awarded by the city-state last year.
New measures, including disallowing debt-financed crypto trading and enforcing asset segregation rules, were introduced following the crypto market turmoil in 2022. These safeguards aim to protect consumers and enhance market integrity. MAS is also reviewing public feedback on proposed measures targeting market manipulation and unfair trading practices, he said.
No Urgent Case for Retail CBDCs
On central bank digital currencies (CBDCs), Chia reiterated MAS’ position that there is currently no compelling need for a retail CBDC in Singapore.
He attributed this to the nation’s efficient electronic payment systems but acknowledged the potential of wholesale CBDCs to address inefficiencies in cross-border payments and securities settlements.
Global Leadership
Chia also highlighted Singapore’s rise as a global fintech hub, with over 1,400 fintech firms and initiatives like Project MindForge advancing responsible AI usage in financial services. MAS continues to lead in setting global standards for fintech and digital asset regulation, collaborating with international bodies to address cross-border risks, Chia noted.
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